Posted on Thursday, Apr 2nd 2015
A report from eMarketer expects apparel and accessories to be the fastest growing segment within retail e-commerce. Analysts expect the market to grow 17% annually through 2017. Billion Dollar Unicorn club member Farfetch is cashing in on this growth.
London-based Farfetch was founded in 2007 by Portuguese entrepreneur José Neves. The company was founded as a project that José set up to leverage his experiences as a fashion designer, wholesaler, and retailer. Prior to setting up Farfetch, José had set up a shoe design business Swear and a fashion licensing and wholesale company bstore. Bstore allowed a niche range of upcoming designer labels to sell their products in a physical boutique store. As part of this enterprise, José realized that there were several designers who had great designs, but depressed market conditions in their local markets and their inability to create a digital experience was slowing their growth.
To cater to these stores, José set up Farfetch. Farfetch enables small, independent boutiques to compete in the digital marketplace while retaining their identity. It was a portal that would offer independent fashion designers an opportunity to compete within the e-commerce segment and was launched as a marketplace to connect these retailers with consumers worldwide.
Today, Farfetch has created an online global community for women and men’s high-end fashion that features over 300 designers and boutiques. They cater to more than 450,000 customers worldwide. Farfetch’s customers can order from boutiques and designers based out of places like Paris, New York, Milan, Bucharest, Riyadh, and Seattle and get their orders delivered to their doorstep. The company aims at supporting independent fashion and the cultural diversity available when dealing with global designers.
The company has grown globally and in 2014 expanded their operations in China, Russia, and Japan. They are targeting expansions in other emerging markets of Latin America and even in mature markets like Germany, South Korea, and Spain. Farfetch believes that emerging markets will help them grow because customers in these markets have the ability to pay, but do not necessarily have the right places from where to make their purchases.
Farfetch does not disclose their financials and their profitability is not known. Recent market reports suggest that their gross merchandise value is at nearly $1 million daily. Their customers have an average shopping cart worth $600-$700.
Farfetch has been venture funded so far with $194.5 million in funding from investors including e.ventures, DST Global, Vitruvian Partners, Condé Nast, Advent Venture Partners, and Index Ventures. Their latest funding was received in March this year when they raised $86 million in a round led by DST Global at a valuation of over $1 billion. Farfetch plans to use the latest funds to continue to invest in growth, especially in international markets.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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